Why Gilead's Sofosbuvir Is Better Than J&J's Simeprevir

Johnson & Johnson's (NYSE: JNJ) simeprevir Achilles' heel is Q80K. Coming out of the FDA's Antiviral Drugs Advisory Committee Meeting on Oct. 24, your takeaway should be that simeprevir is a very good drug with a smaller than hoped addressable market.

When data from J&J's two phase 3 trials were pooled together, patients with the Q80K polymorphism didn't benefit from simeprevir. The sustained viral response over 12 weeks, or SVR12, for Q80K patients was a statistically insignificant 58% versus 55% for the control arm.

"Most striking in the subgroup analysis was the substantial impact of the Q80K baseline HCV GT1a polymorphism on the efficacy of simeprevir. In subjects with the Q80K polymorphism at baseline, no statistically significant difference in SVR12 rates was observed when comparing the simeprevir group to the Control group," according to the advisory committee meeting materials.

Looking at the pooled non-Q80K patients, the SVR12 rate jumps to 84% for simeprevir patients versus just 43% for placebo. This means it's unlikely simprevir will get prescribed for patients with Q80K. That's unfortunate for J&J because Q80K was identified in 48% of HCV genotype 1a patients in J&J's phase 3 trials.

The high prevalence of Q80K in genotype 1 patients is important because in a U.S. study of HCV patients, 56.7% were classified as genotype 1a, 17% as 1b, 3.5% as 2a, 11.4% as 2b, 7.4% as 3a, 0.9% as 4, 3.2% as type 6.

"Given the high frequency of the Q80K polymorphism in the U.S. population and its significant impact on rates of SVR12, DAVP is recommending that all GT1a patients be screened for the Q80K polymorphism. Alternative treatment options should be considered for patients found to be infected with this polymorphic variant," the advisory committee materials went on to say.

The findings give Gilead's sofosbuvir an edgeThat opens up an advantage for Gilead Sciences (NASDAQ: GILD) sofosbuvir, because sofosbuvir doesn't have the same reason for pause as simeprevir in Q80K patients. Sofosbuvir got the advisory panel's unanimous nod of recommendation two days after it recommended simeprevir.

But, Q80K isn't the only advantage sofosbuvir may have over J&J's simprevir. The holy grail of hepatitis C treatments remains discarding prior generation therapies peg-interferon and ribavirin, which are saddled with side effects.

While simprevir will be dosed as part of combination therapy including peg-interferon injections and ribavirin, the panel recommended sofosbuvir dosed with only ribavirin in HCV2 and HCV3 populations as part of an all-oral therapy. In Gilead's phase 3 POSITRON study of patients unwilling or unable to take interferon, SVR12 was 78% versus 0% for placebo.

That two-drug combination provided better outcomes and shorter treatment periods than any of the current standard treatments available. Importantly, the absence of peg-interferon injections marks a big step forward in removing significant hurdles faced by patients who are either unwilling, or unable to tolerate interferon.

Those with the more common HCV1 and HCV4 genotypes will still need to be dosed with peg interferon, but treatment duration drops to 12 weeks, helping limit some of the side effects compared to existing treatment protocols. However, that leaves Gilead on equal footing with J&J in those patients.

You should also know that across Gilead's trials, 12-week dosing didn't have nearly as robust a rate of success in patients with genotype 3 as those with genotype 2. However, in Gilead's FUSION phase 3 trial, extending treatment to 16 weeks produced a much better outcome. In FUSION, the SVR jumped to 62% at week 16 from 38% at week 12. As a result, it's likely protocol for HCV3 patients treated with sofosbuvir will be for the longer treatment period.

The Foolish final takeThe market for hepatitis C is big. The World Health Organization estimates around 170 million are infected worldwide with 2.7 million chronic cases in the U.S. Roughly 20,000 to 30,000 new cases are diagnosed in the U.S. each year.

Both drugs will likely win approval by the FDA, given its common to follow the advice of the advisory panels. But, sofosbuvir likely stands to benefit more than simeprivir when commercialized. However, it's not all bad for J&J.

In a phase 2a study called COSMOS, treating HCV1 patients who had previously failed on peg-interferon and ribavirin therapy with a combination of simeprivir and sofosbuvir without interferon or ribavirin, showed promising results, with SVR8 of 93%. That suggests while simeprevir isn't likely to win the script battle head to head with sofosbuvir, it may find itself part of a later combination therapy with the drug.

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Todd Campbell owns shares of Gilead Sciences. Todd owns E.B. Capital Markets, an institutional research firm serving money managers. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd also owns Gundalow Advisors, LLC, a high net worth advisory firm. Gundalow's clients do not own shares in the companies mentioned. The Motley Fool recommends Gilead Sciences and Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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